Vodafone, Telecom and 2degrees are pushing for mobile networks to be excluded from a controversial bill that could see repeat copyright infringers disconnected from the internet.
The Recording Industry Association has rejected the move and says any illegal activity on internet service providers' networks should be held to account.
Vodafone says making its mobile systems compliant with the bill could cost it up to $2 million.
Government relations head Roger Ellis told the commerce select committee that copyright infringement over mobile internet connections comprised about two percent of online infringement, and including mobile networks in the bill's scope risked "using a sledgehammer to crack a walnut".
The Copyright (Infringing File Sharing) Amendment Bill requires internet service providers to identify which customers have allegedly infringed copyright, in response to complaints from copyright holders, and issue up to three infringement notices to alleged offenders.
The bill enables the Copyright Tribunal to hear complaints and award penalties of up to $15,000, and allows copyright owners to seek suspension of an internet account for up to six months through the district court.
Vodafone senior policy analyst Andrew Cushen says most of its mobile customers were pre-pay customers, and Vodafone often did not know who they were. "How do you serve a notice on someone who has never told you who they are in the first place?"
Vodafone could also be required to serve notices to customers of other providers reselling its network, about whom it knows nothing, he says. "The vast majority of the costs of compliance will fall upon the mobile network."
The company advocates following the lead of countries that have not required mobile operators to implement similar copyright regimes – such as Britain, or that have established "trigger mechanisms" – whereby a copyright regime does not come into effect until the rate of suspected infringement over mobile connections passes a certain threshold.
2degrees and Telecom have echoed Vodafone's call for mobile networks to be exempt.
Recording Industry Association chief executive Campbell Smith says mobile infringement "should absolutely be included".
The bill protects ISPs from being sued by copyright owners for infringements on their networks provided they comply with its requirements on all of their services, he says. "That includes mobile."
Tony Eaton, the executive director of the Federation Against Copyright Theft, says he plans to discuss the proposal with Vodafone and industry group the Telecommunications Carriers Forum in the next few weeks.
"We need to do some research from our side."
Select committee chairwoman Lianne Dalziel said mobile infringements might be low but the growing popularity of internet-enabled tablets such as the iPad – which is designed for downloading and viewing movies and multimedia – could change that.
Telecom, Vodafone, TelstraClear and the TCF said the fees ISPs can charge to copyright owners for issuing notices must reflect their compliance costs, which could reach into the millions of dollars.
Many home internet connections were bundled with other services, such as phone and television, and suspending just the internet connection would be problematic.
They are arguing for a 12-month implementation period for the bill and say the proposed three-month timeframe to alter their systems will drive costs up even further.
The TCF is proposing an alternative scheme under which ISPs would send the original infringement notice but further notices would be sent by the Copyright Tribunal.
It says this would reduce costs for ISPs and mean copyright owners would only have one body to deal with after the original notice, rather than a whole range of ISPs.